President Obama speaks at Cedar Falls Utilities in Cedar Falls, Iowa, on Wednesday. He encouraged the Federal Communications Commission to pre-empt state laws that keep local government from getting directly involved in providing broadband.

Community Networks and the Bully Pulpit

President Obama is expected to make another statement in favor of community broadband networks in Tuesday's State of the Union Address. While his authority in the matter is limited, his promotion of publicly owned networks could help groups that are fighting state restrictions on such systems, according to one community broadband advocate.

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Supporters of municipal broadband networks are looking for a boost Tuesday night from the president’s State of the Union Address.

The president says he’ll push federal regulators to overturn laws that restrict public involvement in providing Internet service. Such laws are on the books in 21 states, according to a new report.

The president has no direct voice in the proceedings of the Federal Communications Commission, which will consider a request next month to undo such laws in Tennessee and North Carolina. But the president’s announcement is important because it shines a national spotlight on community-based networks, said one consultant who helps communities design public networks.

“What the president brings to this issue is serious weight and a ton of public relations,” said Craig Settles, who also writes about broadband issues. “There’s no way broadband advocates could have generated this level of interest and news coverage of the issue without the president’s involvement.”

Last week, during a series of speeches and visits highlighting elements of Tuesday's address to Congress, the president touted community broadband networks as one way to get high-speed service to hard-to-reach communities, including rural areas.

Such community networks can take various forms. A city government or a public utility can build and run the network. In other cases, public entities create partnerships with private Internet providers to improve Internet access and capacity. There’s also another familiar rural model – the cooperative – where customers own and govern the business. Other communities have nonprofit organizations at the center of their public networks.

The important element is to have some local ownership, Settles said, because it ensures that local needs – not just the profits of an absentee corporation – are part of the equation.

In Cedar Falls, Iowa, where the president expressed his support for community broadband, a public utility owns and manages the community broadband network.

With a population of 40,000, Cedar Falls may have some relevance for other small cities and rural communities. The city, which is a couple of hours northeast of Des Moines, is in a metropolitan area, but a small one– just three counties with a combined population of about 170,000. The largest city, Waterloo, has about 69,000 residents – barely above the 50,000 residents required to qualify as metro.

Despite these modest population figures, Cedar Falls boasts a broadband network that can deliver 1 gigabit per second – ranking it among the fastest in the nation.

“In 1994, no provider offered high speed internet service in Cedar Falls, and the phone and cable companies then serving the town had no plans to upgrade their networks any time soon,” wrote the general manager of Cedar Falls Utilities. “Unwilling to wait, citizens led the charge to pass a referendum that founded our community broadband service and tasked CFU with designing, building and running it.”

But communities that would like to follow Cedar Falls’ lead and build their own networks will have a tougher time if they are located in 21 states that have restricted the ability of public entities to own broadband networks.

Restrictions can be especially tough on rural communities, because publicly owned broadband could be the best option for some rural places, Settles said.

“Publicly owned networks are well suited for rural areas because if the private sector owns the network, then it’s all about the stockholders and profits,” Settles said. Because rural markets are smaller, they may not generate the profits that corporations seek before they will invest in infrastructure.

Public networks, however, can invest for other reasons – community good, long-term economic development, public safety. And profits can be reinvested in the network or other local development, Settles said.

Chris Mitchell with the Institute for Local Self Reliance agreed.

“When municipal networks are built, there’s an immediate impact on the people who can take the service,” he said. “But there are also larger benefits for the whole community in the long haul.”

Mitchell’s 2014 report on community-owned broadband in Minnesota found that the public networks resulted in faster speeds and better service in some rural communities. “Some (Minnesota) communities boast networks that provide far greater speeds than are available in the metro area while households a few miles away rely on inferior satellite access or even dialup,” the report said. “A significant factor explaining this variation is whether local governments have taken an active role.”

Municipal broadband can be one strategy for underserved communities that want better broadband access, but it’s not a panacea, said Edyael Casaperalta, coordinator of the National Rural Assembly's Rural Policy Broadband Group and a fellow at Public Knowledge.

“Municipal broadband is not a silver bullet,” she said. “We cannot expect every small town of less than 5,000 people to launch their own broadband network. But when people are encouraged and determined, we must not get in the way of defining their digital future for themselves.”

AT&T, Comcast and other large Internet providers have promoted state legislative efforts to limit public networks and keep local government out of the broadband business. They say public involvement hurts investment and competition and could lead to higher taxes.

“We believe there is no reason to burden consumers with new costs, and citizens with new taxes, when the private sector is risking its own capital to meet demand,” says a release from the industry broadband association U.S. Telecom.

Another industry association, the Information Technology and Innovation Foundation, agreed, in part.

“While municipal networks can be a feasible mechanism to bring broadband to unserved areas, they are generally not how policymakers should go about enabling competition in areas already served by broadband,” said Robert Atkinson, president of ITIF. He said Cedar Falls incurred unneeded debt for its community-owned network to provide services that the private sector could have provided.

Settles was optimistic that the president’s focus on public networks could help build consensus around changing or creating ways to work around state restrictions on community broadband networks. “I think folks are fired up and ticked off about these laws,” he said. “They’ve been living with this for years, having crummy broadband. Now perhaps we can beat these restrictions back in some cases and move forward.”

Settles said that in many cases state laws don’t create an outright ban on municipal networks. Rather, they create roadblocks that make it harder but not impossible for communities to create public networks.

The FCC is scheduled to vote next month on petitions from two public networks, one in North Carolina and the other in Tennessee, challenging state restrictions.